Top 6 Dedicated PE Firms Getting Deeply Involved in Food & Beverage Sector
The last few years were unprecedented years for all industries, and the food and beverage market was no exception. Deal volumes have been significantly impacted since the early months of the pandemic, as both trade and investors largely focused on managing their own businesses and portfolios before exploring inorganic growth prospects. Despite not being a unique phenomenon, the food and beverage industry appears to have weathered the recent global economic downturn very well. After all, this sector has been identified as having tremendous development potential, whetting the appetite of private equity firms interested in completing deals, thanks to its durability and a slow but unmistakable shift in eating and drinking habits.
There are numerous factors that make the food and beverage industry appealing to investors. Whatever else is going on, demand in the sector seems to remain stable. Personally, investors are customers who have favorites and can get thrilled about owning well-known businesses. Both past and recent deal activity suggest that this sector is increasingly leaning on private equity firms to cater to the changing consumer demands. As an industry where sustainability has a direct correlation to profits, entrepreneurs can expect further investments into food technology, sustainable packaging, and efficient supply chains. Investment firms have done more than just invest in brands as they acquire them, bringing more funds, more ideas, and more attention.
If you are seeking a symbiotic relationship with a trusted private equity firm, it’s worthwhile to consider our list of the 6 best ones.
#1. Shore Capital Partners – The ‘Hustle Elephant’ on Chicago Street
Founded in 2009, Shore Capital Partners is a food & beverage-focused private equity firm based in Chicago, Illinois, seeking to make control investments in lower middle-market businesses to partner with entrepreneurs and executives to drive growth at companies. Utilizing a proactive, research-led investment process, the firm’s approach is to support entrepreneurs with capital, business development expertise, and industry knowledge. Shore targets investments in proven, successful private companies with superior management teams, stable cash flow, and significant growth potential, including organic and growth through industry consolidation.
Shore Capital Food & Beverage Partners is focused on making control equity investments in food & beverage manufacturing, distribution, packaging, and related B2B service companies. The firm utilizes a proactive, thesis-driven investment process to identify attractive investment opportunities in proven, successful private companies with superior management teams, stable cash flow, and high growth potential. Upon consummation of a partnership, it supports its partner companies with capital, business development expertise, and industry knowledge and relationships to drive transformational growth.
Some of the firm’s outstanding portfolio companies include BevSource, an outsourced beverage solutions provider offering beverage development, scale-up, quality assurance, production management, packaging, and ingredient procurement; Innovative Packaging Company, a full service, value-add provider of packaging solutions to various end-markets and customers; Main Street Gourmet, a custom wholesale bakery providing frozen baked goods, including muffins, cookies, granola, brownies and bars, and other sweet goods; Old World, a manufacturer of custom blended spices, seasonings, ingredients, dry food products, and sauces for the retail, foodservice, and industrial channels; and many others.
#2. CIC Partners – The ‘Grown-Up’ Dallas Cowboys
Founded in 1983, CIC Partners is a middle-market private equity firm based in Dallas, Texas. The firm prefers to invest in growth-oriented companies primarily in the food & restaurant, healthcare, and energy industries through means of buyouts, recapitalization, and growth capital. CIC looks for opportunities where it can leverage the collective experience of its investment team and its Operating Partners, who are successful CEOs and entrepreneurs, to guide, support, and add value to portfolio companies. The firm aims to bring vertical industry expertise and senior-level relationships with decision-makers and top-tier operators within its core industries.
With the experience of over 25 years, the firm strives to generate wealth by creatively leveraging the investment and operational experience, expertise, and success of its partners. Its strategy is to identify talented owner-operators and management teams whose companies present compelling opportunities for growth with the investment thesis centered on alignment and partnership with operators. CIC is often the partner of choice for successful owner-operators looking for financial and industry expertise and guidance as part of their overall growth strategy. Its flexibility allows it to invest as majority and minority investors.
Some of the firm’s outstanding portfolio companies include CraftMark Bakery, a leading supplier of frozen bakery products to the foodservice and in-store customers; McClancy Foods & Flavors, a custom manufacturer of breading, batters, seasonings, spices, and dry-mixes serving the foodservice, retail, and contract manufacturing industries; Willie’s Grill & Icehouse, a leading regional fast-casual restaurant concept operating 17 restaurants across Central Texas; Tiff’s Treats, which delivers classic, baked-to-order cookies, and brownies straight from the oven; and many others.
#3. Sentinel Capital Partners – The Guys Love Quick Bite on New York Street
Founded in 1995, Sentinel Capital Partners is a lower middle-market private equity firm based in New York. Food and restaurants are among the firm’s important sectors. Besides buyouts, restructurings, divestitures, acquisitions of family businesses, and going-private transactions, the firm also invests in special situations including balance sheet restructurings and modest operational turnarounds. It seeks businesses with attractive prospects and high-quality management teams who are interested in becoming owners of the companies they operate. Sentinel team has an established record and access to the critical resources growing businesses need with the experience and expertise to execute a wide variety of private equity transactions.
Whether you are an entrepreneur or business executive looking for a financial partner, a business owner considering a sale, or an investor seeking a superior risk-adjusted rate of return, choosing the right private equity partner is an important decision with long-term implications. Sentinel understands that owning a company requires responsible stewardship and that accepting investment capital from others is a tremendous responsibility. Therefore, the firm seeks to be thoughtful and prudent guardians of the businesses it oversees and the capital it manages. The firm makes decisions based on consensus and collaboration, believing that its professionals bring unique perspectives and meaningful experiences to the table.
Some of the firm’s outstanding portfolio companies include Border Foods, a company originally organized by Sentinel Capital Partners and management, owns, operates, and franchises 170 Taco Bell, Pizza Hut, and KFC restaurants in Minnesota; Fazoli’s Group, a franchisor and operator of Italian fast-casual restaurants and is well-positioned to accelerate its growth in the rapidly expanding fast-casual segment of the restaurant industry; Buffets, the largest operator of buffet-style restaurants with 410 restaurants; Newk’s Eatery, a franchisor, and operator of fast-casual restaurants; and many others.
#4. Keystone Capital – The Bakery Store Helpers Across the Chicago Main Street
Founded in 1994, Keystone Capital is a private equity firm headquartered in Chicago, Illinois. With professionals distinguished by the strong investment experience and substantive operating knowledge, the firm seeks to invest in food & beverage and many other niche industries. It creates true partnerships with the talented management teams of the companies it acquires, playing a significant supporting role to help each business continue to grow profitably. Keystone also offers the strength and security of a very few, but dedicated banking relationships. This means the firm brings access to reliable capital in uncertain economic times, and financial support that comes with a partnership mindset.
Keystone is single-mindedly focused on working hand-in-hand with business leaders to create long-term value. Investing in long-term capital affords the firm tremendous flexibility that provides it with a risk-return profile in sync with management and allows it to make decisions based on long-term goals while forging true partnerships with its management teams through good times and bad. Its partnership approach extends to third-party service providers. The firm has steadfast, long-standing banking relationships providing it strength, security, and reliable financial support, even in uncertain economic times.
Some of the firm’s outstanding portfolio companies include Hometown Foods USA, a manufacturer of bagels and cake products selling to in-store bakeries, club stores, and the foodservice channels; Keystone Natural, a manufacturer of healthy, plant-based protein products including tofu, meatless veggie burgers, and other soy-based and vegetarian items selling into the retail and foodservice channels; Keystone Bakeries, a supplier of cupcakes, donuts, and cookies to the in-store bakery channel; Vista, a converter and distributor of meat packaging products; and many others.
#5. LongueVue Capital – The NOLA’s Friendly Neighborhood Loves Tea Time
Founded in 2001, LongueVue Capital is a private equity firm based in Metairie, Louisiana. The firm seeks to invest in companies operating in the food & beverage and some other sectors. Its relationship-driven approach attracts entrepreneurs seeking both capital and a trusted partner to successfully navigate their company’s next phase of growth. The firm’s investment professionals and an extensive network of operating executives have a demonstrated track record of partnering with growing businesses to create value in the lower middle market. Together with its entrepreneur and management team partners, the firm helps create superior value for its portfolio companies and investors.
LongueVue’s opportunistic investment strategy provides the flexibility to partner with attractive businesses across a variety of industries and situations, enabling the firm to tailor transaction structures to meet the company and stakeholders’ objectives. While the firm is selective with its investment strategy, it targets growth-oriented companies with scalable, sustainable business models and exceptional leadership teams. Its proactive and hands-on approach ensures that it’s fully engaged partners with the management teams of its portfolio companies and trusted, dependable strategic partners to all stakeholders.
Some of the firm’s outstanding portfolio companies include Pod Pack International, a leading manufacturer of innovative single-verse coffee, tea, and other beverage solutions; Summit Plastics, a niche manufacturer of custom low-density and linear low-density polyethylene blown film and bags; Traco Manufacturing, an Orem, UT-based specialty provider of business-to-business packaging solutions; TileBar, a leading provider of high quality and price-competitive ceramic, porcelain, and mosaic tile as well as specialty interior products; and many others.
#6. Manna Tree Partners – The ‘Health Watcher’ on the Top of the Mountain
Founded in 2018, Manna Tree Partners is a private equity firm based in Vail, Colorado. Manna Tree team lives the values of improving human health and invests heavily in growth-stage companies that provide food & beverage, personalized nutrition, food and nutritional ingredients, food production, and consumer products, which makes a positive impact on human health through nutrition. In today’s rapidly changing food industry, the firm’s founders support non-profit research and programs through partnerships with leading research on nutrition across consumer products. It believes the future food system won’t be improved through capital alone, but elevating standards across the industry will further accelerate change.
Manna Tree leverages its operating experience and surrounds founders with resources to professionalize their operations and ensure production can keep pace with growth. Portfolio companies are positioned to attract large strategic investors due to the integrative supply chain approach and commitment to healthy ingredients. The firm relies on the expertise of its deep technical and financial networks to source deals, evaluate transactions, and prepare portfolio companies for meaningful and successful exits. It partners with Advisors that are well-versed in agricultural markets, supply chain logistics, consumer packaged goods, private equity investing, leadership development, family enterprise strategy, strategic M&A, operations, and more.
Some of the firm’s outstanding portfolio companies include Vital Farms, the leading brand of pasture-raised eggs where mission-minded people work together to bring ethically produced food from family farms to families’ tables; Verde, the number one supplier of natural and organic grass-fed beef in the country; Nutriati, an ingredient-tech company with a consumer vision, helping create a world where innovations in taste & nutrition drive the livelihood of farmers and community while restoring balance to our planet; The New Primal, a pioneer of clean-ingredient meat snacks, seasonings, dressings, and condiments; and many others.
The Bottom Lines
We’re living in a world where change is relentless and technology innovation has the ability to turn practically any industry on its head. What does not change is people’s need for nourishment and desire for flavorful and satisfying food experiences. In light of the relative safety of investing in the sector, and the significant investment opportunities available in such a fragmented market, interest in the food and beverage space is expected to remain strong in the coming years, as an attractive proposition for private equity investors.
